Trustees approve moving-up closing date on bank purchase
By John Gardner
The Berthoud Board of Trustees first repealed the ordinance passed at the March 22 meeting that approved the purchase of the Guaranty Bank and Trust building, and then passed a resolution 6-1, again approving the purchase and the $2.35 million supplemental budget appropriation needed to fund the agreement at its Tuesday meeting. The resolution provides Mayor David Gregg and Town Administrator Mike Hart the authority to execute any document necessary to close the transaction by the original March 31 closing date.
The original purchase agreement specified an ordinance be approved by the town board to complete the transaction; however, the ordinance takes 30 days to take effect, which pushed the closing date to April 23. According to a memo from town staff, Guaranty Bank agreed to accommodate the later closing date, but acknowledged it would be to their benefit to move the closing back to the March 31 date, if possible, due to decisions that need to be made in order to proceed with the merger with Home State Bank. Guaranty Bank offered to reduce the price by $50,000, to $2.35 million, if the trustees would be willing to repeal the ordinance and pass the resolution, accommodating the original closing date.
Trustees failed to pass an ordinance that included an emergency clause at the March 22 meeting that would have waived the 30-day period and allowed the original closing date to be met. That motion failed in a 5-1 vote with Trustee Paul Alaback voting no on the motion. Trustee Suzie White was absent from that meeting.
According to Nathan Klein, broker for LC Real Estate who is brokering the transaction, speaking on behalf of Paul Taylor, Guaranty Bank and Trust CEO, the March 31 date needs to be met in order for the banks to receive federal approval of the merger.
The resolution passed Tuesday provides a supplemental appropriation of funds in the amount of $2.35 million to be allocated equally between the town’s general fund capital improvements account, the wastewater utilities fund, and the water utilities fund. Those portions of utilities funds are impact fees the town receives through development fees and building permits. But that was the main point of contention for those opposed, including Alaback.
“What’s particularly hard about this is that it’s a very unconventional way of financing this purchase,” Alaback said.
If this purchase is a legitimate use of wastewater enterprise funds and water enterprise funds is what is being contested. When the enterprise funding accounts were created, the resolution stated the impact fees can be used for the acquisition and sale of real estate, but some argued a town hall doesn’t fit within those parameters.
Former mayor, Milan Karspeck, who’s been an outspoken opponent of the purchase once again opposed the funding for the purchase, calling it a misuse of enterprise funds. He said these specific funds should be used for water system infrastructure improvements and to pay down debt related to the system.
“This simply isn’t worth the lack of public involvement in this decision,” Karspeck said.
He proposed the transfer of funds be a loan that would be repaid to the utilities with interest instead of a one-time depletion.
“That would resolve a lot of difficulties I have with this,” Karspeck said.
Using enterprise funds for this purchase is legal, according to Town Attorney Greg Bell, who told trustees at the meeting it’s a matter of facilities acquisitions, which is one of the specific statutory uses for impact fees.
“The legal standard is pretty clear that certainly buying a facility is a statutory use of those impact fees,” Bell said.
And Hart said it’s not only legal, but an appropriate use of impact fees as well to purchase a building that will house the town’s utility department’s offices. In Berthoud, all of the town’s business – including the water and wastewater business – is done at Town Hall. The town has water and wastewater facilities, but those departments are government-run businesses and, other than treating the water and fixing the pipes, all of the related business is done at Town Hall, Hart said.
“To us, it makes perfect sense to use part of these [enterprise funds] to put that roof over your head to do the business functions,” Hart said.
Several residents opposed to the purchase spoke at the meeting, but there were also several who supported it this time too, including Planning Commission member Bill Gilmore.
“As a concerned citizen and a member of the Berthoud community, I think it’s a good call and I think you should move forward with it,” Gilmore said.
Trustee candidate Jeff Hindman said he would still like the trustees to take more time to garner public input regarding the deal.
“I think everybody owes Paul Alaback a big pat on the back because had he not voted against the emergency ordinance a week ago, you wouldn’t be saving $50,000,” Hindman said. “It also makes me wonder if you wait another month the price may get closer to $2 million.”
Patrick Dillion, another trustee candidate, didn’t take a position on the issue but provided another perspective about the growing public distrust, saying if it’s a good deal or not, “It’s going to be a hard pill for some people to swallow; they feel like trust is lost in the democratic process.”
Alaback agreed with that statement about growing distrust among residents.
“The stature of this board and of this town would be considerably improved if we had a more open process and put it to a vote,” Alaback said. “I think that would have been a better process.”
In the end, the motion passed with Alaback again casting the lone no vote.
Mayor Pro Tem Jan Dowker said she hopes eventually everyone will accept the board’s decision and ultimately embrace the new Town Hall site.
“I hope this decision is just one more that – as this building [becomes] a Town Hall – we can all take pride in,” Dowker said.
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